THE EFFECT OF CELEBRITY
ENDORSEMENT ON CONSUMER
TABLE OF CONTENTS
S.NO. TOPIC PAGE NO.
1. Literature Review 5-6
2. Description of the project 7-8
3. Objective of the project 8
4. Introduction 9
5. Celebrity Endorsement 10
6. Difference between brand ambassador and brand face 10
7. Celebrity endorsement as a strategy 12-38
8. Consumer Behavior 38-44
9. Research method 45-46
10. Analysis of questionnaire 47-54
11. Findings 55
12. Conclusion 56
14. Limitations 57
15. References 58
16. Annexure 59-61
Earlier many research studies have been conducted on the same topic. But each carried some
drawbacks and limitations
On the concept and application of celebrity endorsement Agarwal and Kamakura¹ (1995) cited
industry sources who estimate that approximately 20% of all television commercials feature
famous people. Certain sets of products feature celebrity endorsements more often. (Agarwal &
Kamakura, Study) .They studied all endorsement contracts over the period 1980-1992. In their
sample 60% of the endorsement deals involve soft drink companies and athletic shoes
manufacturers. They also provided an event study that examines abnormal stock returns on the
day that a company announces the signing of a celebrity for product and endorsement purpose.
How celebrity endorsements affect consumer purchase decision is studied extensively by
marketing and social psychology researches. Various hypothesis have been put forward
i) Celebrity endorsement has recall of the product,
(ii) Celebrities have credibility on expertise that makes the product more desirable or enhances
perceptions of quality
(iii) The celebrity endorser’s image is transferred to the product so that those who use the
product are associated with the image.
iv) Experiments suggest that in certain situations, celebrity endorsement can enhance, recall and
consume assessment of the products. (Clark & Horstman, 2003)
Mishra and Beauty³ (1990) Petty et al (1983) and Menon et al ²(2001)
Indicate that celebrity endorsements enhance brain recall. Petty et al found that subject tended to like the
product more when it was endorsed by the famous athlete than by the average citizen of California.
Mishra and Beauty found that subject tended to rate the product as better and of higher quality if it was
endorsed by a congruent celebrity. Horstman and Clark 2003 provide a model that explains the success of
fictional Celebrity endorsement. They find that if there are two celebrities that achieve the same audience
variable cost, the firm prefers the celebrity with lower fixed cost .In this sense, cultural icon like Ronald
McDonald, Amul Girl, Pillsbury dough boy, fidodido are the ideal celebrities as they are memorable and
so have a low cost of audience reach and are fictional so do not have large endorsement fees.
Prachi Raturi 4(2005) found that when it comes to selling, there is nothing quite like a celebrity
sales person. Signing a celebrity helps the brand leap out of clutter and if the chemistry between
the celebrity and the brand is right, the buzz could well turn into a roar. Cyber media research
study published in business world unearthed different truths about celebrity endorsement. The
study spread over 3 phases in different cities of India (Delhi, Mumbai, Chennai, Kolkata, Nasik,
Coimbatore, and Meerut) 12 focus group interviews, 6 expert instruments and 8 expert
interviews with ad agencies were conducted. Besides this survey of 480 respondent in 4 cities
and 3375 respondent in 8 cities helped to develop different insights on celebrity endorsements
that are given as under:
(i) Over 80% of the people remembered the celebrity but forgot about the brand.
(ii) Different stars appealed to different geographic groups of customers (e.g. Aishwarya Rai had
highest recall in down south as against ShahRukh Khan who had little appeal there).
(iii) Research emphasized that ads without celebrity had a good a chance of working as one with
them. For instance, Hutch ad did better jobs of building a brand then coke which had many big
celebrity names associated with it.
Dr.Puja Khatri5 (2006) found that there are risks associated with celebrity endorsement and the
marketer should find out that how far the benefits outweigh the risk associated. By doing
secondary research she also found out that celebrity itself does not guarantee sales.
Some of the MBA students have also worked on this project before.
Faizal Saeed 6(2008) “ Effect of celebrity endorsement in advertising on consumer behavior”.
He has done extensive secondary research but not the primary data. Due this limitation the data
collected and the conclusion reached may not be appropriate.
Sandeep Sharma, Lovely Professional University 7(2009).He has used both primary and
secondary data for the study but his research was more focused towards automobile sector and
thus the data collected by him could not be applied to different fields.
Any promotional campaign needs several issues to be addressed to, thereby empowering
promotional planners to know how decisions about the different controlled or independent
variables of the communication process that influence the stages of the response hierarchy in
persuading the receiver. Several models have been developed that give insight to independent
variable effecting celebrity endorsement and hence its efficacy.
The studies conducted were either done by U.S. researchers or even if Indian they emphasized
more on secondary data. I have tried to use both secondary as well as primary data for my
Description of project in brief: While undertaking this project I will work on the effect of
celebrity endorsement on consumer behavior and brand management. The study would focus on
whether a celebrity endorsee advertisement is more attention getting and memorable than other
kind of advertising, and would try to find out customers perceptions regarding the celebrity and
brand. Also how the companies cope up with their costs when there is a mismatch between brand
Objective of the project: Towel-clad models can sell just about anything soaps, shampoos,
body lotions, safety razors, men's toiletries, ceramic titles, bathroom fittings, and any consumer
durable even cars. And if the model happens to be a television icon that enjoys a huge fan
following among masses, the product will sell like hot cakes. Using celebrities the pedal is a
ware is not new for Rs. 5000 crore Indian advertising industry. After all it is easier to influence if
the celebrity is endorsee the brand. Says Imran Siddiqui, model coordinator, Ammirai Puries
Lintas: “The strategy helps because a celebrity is instantly recognizable and brand recognizable
To find out the effect of this strategy on share price of a company and its sales.
This study aims at understanding the impact of celebrity endorsee on brand building and
consumer buying behavior.
To identify the influence of celebrity endorsee on consumer buying behavior and brand
To study the basic situations where celebrity endorsement is helpful to a marketer.
Advertisers pay millions of dollars to celebrity hopping that the stars will bring their magic in the
brand they endorse and make them more appealing and successful.
To identify is celebrity endorsee advertising more attention getting and memorable than other
kind of advertising.
To study the situations where this strategy may not be effective.
To study how should a brand find out whether using which celebrity is profitable.
To identify how is celebrity endorsee advertisement perceived
Methodology: For preparing the project primary as well as secondary data has been used.
Firstly, for collecting data survey is being conducted. An approximate 500 respondents
will be randomly selected and interviewed.
This interview will be based on questionnaires. The questionnaire will contain both
dichotomous questions and multiple choice questions.
Before that a pilot test will be conducted on small number of people to test the feasibility
of the questionnaire. On receiving favorable outcome the questionnaire will then be
proceeded to be filled by larger number of people.
Different age groups will be considered for the purpose, to avoid the concentration of any
one specific age group.
The questions will range from general to specific to know the different aspects related
with celebrity endorsement.
After the data collection through primary source, various tools will be applied on it. The
data will be grouped together and tools like chi-square test, regression and Anova will be
used to check the validity, dependability and reliability of the data collected.
Research is also done through Secondary Data, collected from different journals, magazines,
academic books etc., to understand consumer behavior and role of celebrity endorse.
1ntroduction to the subject
There are a large no. of brands available in the market. Some are very familiar and rests are
somewhat less familiar. What are the things that distinguish those from rest? It may be brand
name, advertisement, royal heritage and may be celebrity endorsers who endorse them. E.g. Reid
and Taylor have the rich heritage of ropping in various cascades of James Bond 007 as their
brand endorser and it has helped them strongly to build their brand. Businesses have long sought
to distract and attract the attention of potential customers that live in a world of ever-increasing
commercial bombardment. Everyday consumers are exposed to thousands of voices and images
in magazines, newspapers, and on billboards, websites, radio and television. Every brand
attempts to steal at least a fraction of an unsuspecting person's time to inform him or her of the
amazing and different attributes of the product at hand. Because of the constant media saturation
that most people experience daily, they eventually become numb to the standard marketing
techniques. The challenge of the marketer is to find a hook that will hold the subject's attention.
Also from a marketing communications perspective, it is vital that firms design strategies that
help to underpin competitive differential advantage for the firm's product or services.
Accordingly, marketing communication activities back-up other elements in the marketing mix
such as designing, branding, packaging, pricing, and place. The term Celebrity refers to an
individual who is known to the public (actor, sports figure, entertainer, etc.) for his or her
achievements in areas other than that of the product class endorsed (Friedman and Friedman,
1979). This is true for classic forms of celebrities, like actors (e.g., Amitabh Bachchan,
ShahRukh Khan, Rani Mukherjee Amir Khan and Pierce Brosnan), models (e.g., Mallaika Arora,
Lisa Ray, Aishwarya Rai, Naomi Campbell, Gisele Buendchen, etc), sports figures (e.g., Sachin
Tendulkar, Zaheer Khan, Sourav Ganguly, Anna Kournikova, Michael Schumacher, Steve
Waugh, etc), entertainers (e.g., Cyrus Broacha, Oprah Winfrey, Conan O'Brien), and pop-stars
(e.g., Madonna, David Bowie) - but also for less obvious groups like businessmen (e.g., Donald
Trump, Bill Gates) or politicians.
Celebrities appear in public in different ways. First, they appear in public when fulfilling their
profession, e.g., Vishwanathan Anand, who plays chess in front of an audience. Furthermore,
celebrities appear in public by attending special celebrity events, e.g., award ceremonies,
inaugurations or world premieres of movies. In addition, they are present in news, fashion
magazines, and tabloids, which provide second source information on events and the 'private life'
of celebrities through mass-media channels. Celebrities act as spokes-people in advertising to
promote products and services, which is referred to celebrity endorsement. Firms spend all this
money on endorsement because finding right celebrity endorser for their
products can pay tremendous dividends. For example, some brands such as Nike's Air Jordan
have been built around the image of a star. Nike earned over $200 million from its Air Jordan
Lines of shoes and clothes in 1991 alone. Yet as the example of Madonna suggests, celebrity
endorsers cave a powerful means of communicating a distinct image for a brand to target
segment as well as a source of problems for the advertiser. Other types of endorsers can be
equally effective but cost much less.
McCracken's (1989) definition of a celebrity endorser is, "any individual who
enjoys public recognition and who uses this recognition on behalf of a consumer good by
appearing with it in an advertisement. Marketing communications is useful, because when
celebrities are depicted, they bring their own culturally related meanings, thereto, irrespective of
the required promotional role."
Friedman and Friedman (1979) found empirical evidence that, in the
promotion of products high in psychological and/or social risk, use
of celebrity endorser would lead to greater believability, a more
favorable evaluation of the product and advertisement, and a
significantly more positive purchase intention.
Thus, companies use celebrities to endorse their products; however,
there are deeper attributes that are involved in celebrity
endorsement. Celebrities might endorse as a brand ambassador or a brand face. Some time
people have this habit of relating this very term of celebrity endorsement with brand face. But
this is not so.
Difference between Brand Ambassador & Brand Face
A Brand Ambassador would be one who is not only a spokesperson for the brand or is just
appearing as a testimonial for the brand's benefits. He/she is an integral part of the brand persona
and helps to build an emotional, which goes beyond just appearing on TV commercials. He takes
up the cause of a Brand Champion and is associated with every aspect related with the brand.
What is more, there is a significant difference between making just an endorsement for say, a
shampoo or an automobile, and being that brand's alter ego. Both parties take the latter far more
seriously to the deal. So a brand ambassador would be involved in press releases, he/she would
be actively participating in any sales promotion, sporting the Brand all the while. For example,
Fardeen Khan is the brand ambassador for Provogue while he remains a brand face for Lux Body
Wash. On the other hand, a Brand Face would be the current celebrity who is just used as a tool
to increase brand recall and is only appearing in the advertisement. It is usually seen that a brand
face is a temporary contract and is very short term at times. An example would be Sona Chandi
Chawanpryash using Sourav Ganguly for a while in its commercials. Brand Faces are easily
forgotten and fade away with the campaign's end.
The motive behind total branding may be decocted as an attempt to amalgamate diverse activities
to win customer preference. The crescendo of celebrities endorsing brands has been steadily
increasing over the past years. Marketers overtly acknowledge the power of celebrities in
influencing consumer-purchasing decisions. It is a ubiquitously accepted fact that celebrity
endorsement can bestow special attributes upon a product that it may have lacked otherwise. But
everything is not finite. Celebrities are after all mere mortals made of flesh and blood like us. If a
celebrity can aggrandize the merits of a brand, he or she can also exacerbate the image of a
Celebrity endorsements are impelled by virtue of the following motives:
nsions to the brand image.
An endorser is a person, character or organization that speaks or appears in an ad in support of
the advertiser or its claim. The terms endorser includes the terms spokesperson or model. The
endorsement process is the identification, selection and use of endorsers to communicate with a
Endorsers can be grouped into three broad classes:
3. Lay endorsers.
Each has special characteristics and roles in the communication process. We will first consider a
definition of the three types of endorser and then describe their roles.
Expert Experts are
individuals or organization that the target population perceives as having substantial knowledge
in a particular area. Typically experts are chosen because of the knowledge they have
accumulated through experience, training or study. Various organizations such as the American
Medical Association, the American Dental Association, Good Housekeeping and the US
Department of Agriculture will certify the quality of products, sometimes through awarding seals
of approval. A seal of approval is a logo of the certifying organization that appears on the
products package or ad and states that the certifying organization vouches for the merits of the
product. In some cases the organizations are paid by the manufacture of the products, while in
other cases the endorsement is made in the public interest.
For example, Pepsi has always promoted its drink as the choice of a younger generation.
Madonna probably personified many characteristics that generation valued, such as sexual
freedom, self-expression and rebellion against strictures. Celebrities may not always be explicitly
identified by name, especially if they are well known to the target audience.
Celebrities are individuals or characters who are known to a large portion of the general
population, primarily because of the publicity associated with their lives. Most celebrity
endorsers come from the entertainment world (Whitney Houston in AT & T's "True Voice"
campaign) or the sports world (tennis legends Jimmy Connors and Chris Evert Lloyd for
Nuprin). Talk show hosts (Rush Limbaugh for orange juice), business personalities (Lee locacca
for Chrysler cars) and politicians (Bill Clinton for a Public service campaign against violence are
also used. Reporters (Dan Rather) educators (Carl Sagan), consumer advocates (Ralph Nader)
and Religious leaders (Billy Graham) could also serve as effective endorsers though they may be
unwilling to tarnish their images by appearing in paid commercial endorsement.
Are unknown individuals or characters that appear in ads, just like Harry, Louise and Libby?
They are selected to closely resemble the target segment, enabling the target segment to identify
with the endorser and the message. However, for some products such as perfume or clothing and
services such as insurance and health care these lay endorsers may be chosen because they
personify the aspirations of the target segment.
Celebrity Endorsements as a strategy
Signing up stars for endorsements is a time-tested strategy and has been effectively used by
some of the top brands in the world including Nike and Pepsi. In India too, HLL has used Hindi
film stars to endorse their beauty soap Lux since the fifties. Vimal, Thumbs Up, Gwalior and
Dinesh are some of the other brands that used star-appeal in the early days of mass advertising.
Yet, there are some who don’t have much conviction in star endorsements. Adrian Mendonza,
Executive VP and Creative Director of Rediffusion DY&R do not recommend celebrity
endorsements because he thinks that to be really successful, a brand needs to have a strong
identity of its own. It should ideally not piggyback on the identity of a celebrity and hope to
achieve success. Mendoza adds, “I somehow get this feeling that not much effort is put in to
think through an ad with a celebrity. Most times it seems like it is just the celebrity saying ‘I use
this product, so why don’t you’ kind of thing and the ad agency thinks it has done its job”.
Most experts concur that, when used judiciously, celebrity endorsements can be an effective
strategy. According to Mohammed Khan, Chairman of Enterprise Nexus, “Using a celebrity by
itself is not a bad idea provided it is done intelligently.” And there are many examples of good
and bad use of celebrities. Take Amitabh Bachchan, who has been used by some companies like
Parker Pens and ICICI Home Loans remarkably well while some others have been unable to
exploit his Big B status too well. ShahRukh Khan’s endorsement of Hyundai Santro too seems to
have worked well. Parmeswaran adds, “We used cricketers like Rahul Dravid for Castrol in an
attempt to break out of the clutter, as well as have an image rub off of ‘dependability’ on to the
Celebrity endorsements are capable of manifesting both favorable and adverse effects for the
brands with which they associate. Let’s analyze both.
Six uses of Celebrity Endorsements
Establishes Credibility: Approval of a brand by a star fosters a sense of trust for that brand
among the target audience- this is especially true in case of new products.
Attracts Attention: Celebrities ensure attention of the target group by breaking the clutter of
advertisements and making the ad and the brand more noticeable.
Associative Benefit: A celebrity’s preference for a brand gives out a persuasive message -
because the celebrity is benefiting from the brand, the consumer will also benefit.
Psychographic Connect: Stars are loved and adored by their fans and advertisers use stars to
capitalize on these feelings to sway the fans towards their brand.
Demographic Connect: Different stars appeal differently to various demographic segments (age,
gender, class, geography etc.).
Mass Appeal: Some stars have a universal appeal and therefore prove to be a good bet to
generate interest among the masses.
Attractiveness and Credibility. Each involves a different mechanism by which the endorser
affects consumer attitudes and behavior. Some of these points have already been mentioned, but
a formal treatment will now ensure that these key concepts are fully understood.
FACTORS INFLUENCING CELEBRITY ADVERTISING AWARENESS IN PRINT
Popularity of celebrity Ease of celebrity
recognition in Ad
Less Popular Less Easy to Easy to
Popular Recognize Recognize
Awareness Index (%)
Low (less than 80) 19 8 22 11
Average (80-120) 31 28 37 25
High (121 and above) 50 64 41 64
Number of ads in 190 58 106 142
Source: Data from Gallup & Robinson, Inc.
When receivers find something in an endorser that they consider attractive persuasion occurs via
an identification process. That is when receivers perceive a source to be attractive; they identify
with the endorser and are very likely to adopt the attitudes, behaviors, interests, or preferences of
In other words, an attractive endorser does not necessarily benefit a product if there is a poor
matchup between the endorser and the product.
Trustworthiness refers to the honesty, integrity and believability of a source. While expiates
and trustworthiness are not mutually exclusive, often a particular endorser is perceived as highly
trustworthy but not particularly expert. An endorser's trustworthiness depends primarily on the
audience's perception of his or her endorsement motivations. If the audience believes that an
endorser is motivated purely by self-interest, he or she will be less persuasive than someone the
audience perceives as having nothing to gain by endorsing the product or as being completely
Two important properties of endorser credibility are expertise and trustworthiness. Expertise
refers to the knowledge, experience or skills possessed by an endorser as they relate to the
communications topic. Hence, athletes are considered to be experts when it comes to the
endorsement of sport-related products. Expertise is a perceived rather than an absolute
phenomenon. Whether an endorser is deed an expert is unimportant; al that matters is how the
target audience perceives him or her. An endorser perceived by an audience as an expert on a
given subject is more persuasive in changing audience opinions pertaining to his or her area of
expertise than an endorser who is not perceived as possessing the same characteristic. This no
doubt explains the extensive use of athletes to endorse sports-related product.
The Match up Hypothesis and balance Theory
Recognizing the need for a celebrity to influence the endorsed product positively, it is well
established that the message conveyed by the image of the celebrity and the message about the
product ought to converge in effective ads. The match up or congruence between the two is
important because it allows for meaningful processing and makes it more possible it more
possible for the brand name to be effectively linked and associated with the celebrity. When the
celebrity's image or attributes do not coincide with the known attributes of the brand, product,
service, incongruent results are attained. It should be less difficult to associate the meanings of a
celebrity with a product lacking an existing meaning than to change the existing meaning of a
brand by adding new associations.
Scope of Celebrity Endorsement:
The use of testimonials by advertisers dates back to the 19th century when medicines were
patented. Firms have been juxtaposing their brands and themselves with celebrity endorsers (e.g.,
athletes, actors) in the hope that celebrities may boost effectiveness of their marketing. The
increasing number of endorsements throws a valid question to the consumers. Is there a science
behind the choice of these endorsers or is it just by the popularity measurement? What are the
reasons which lead to impact of celebrity endorsement on brands? The success of a brand
through celebrity endorsement is a cumulative of the following 14 attributes. Greater the score of
the below parameters, greater are the chances of getting close to the desired impact.
Impact Regions of Celebrity Endorsement
While brand marketers with positive experiences would tend to believe that celebrity
endorsements work and some would disagree, but one would be sure that the magnitude of its
impact is difficult to measure even if sales figures are at our disposal. However, we can
understand why it works and the impact regions of celebrity endorsement.
Source: robbinson and gallop inc
How Celebrity Endorsements Influence the Consumer
The basis for the effectiveness of celebrity-endorsed advertising can be linked to Kelman's
processes of social influence as discussed by Friedman and Friedman. According to Kelman,
there are three processes of social influence, which result in an individual adopting the attitude
advocated by the communicator.
Compliance, Identification & Internalization
These latter two processes are particularly applicable to celebrity-endorsed advertising.
Compliance infers that another individual or group of individuals influences an individual cause
he or she hopes to achieve a favorable reaction from this other group.
This process of social influence is not directly applicable to celebrity advertising because there is
little, if any, interaction between the celebrity and the consumer.
Identification applies to the situation wherein the individuals emulate the attitudes or behavior
of another person or group, simply because they aspire to be like that person or group. This
process is the basis for referent power. It was found that celebrities are more commonly liked
than a typical consumer spokesperson.
Internalization as a process of social influence is said to occur when individuals adopt the
attitude or behavior of another person because that behavior is viewed as honest and sincere and
is congruent with their value system. The effectiveness of celebrity advertising traditionally has
not been strongly linked to this process, as a celebrity's reason for promoting a product can just
as easily be attributed by the consumer to an external motive (i.e., payment of fee) as to an
internal motive (i.e., the celebrity's true belief in the value and benefit of the product). An
important issue of concern relates to the development of a strategy for use in Celebrity
Advertising, which benefits from the dramatic impact of dual support of both the identification
and internalization processes of social influence. Celebrities are well-liked, but the techniques
that can be used to enhance their credibility as spokespeople, and therefore, tie-in more closely
with the internalization process needs to be looked into.
Effectiveness of Celebrity Endorsers
The sources that companies use to present their advertising message typically attempts to project
a credible image in terms of competence, trustworthiness or dynamism. Celebrity endorsers are
considered to be highly dynamic, with attractive and engaging personal qualities. Audience may
also trust the advice given by some famous person, and in certain cases, celebrities may even be
perceived as competent to discuss the product.
The most widely used celebrities are sports figures, actors or other types of entertainers. There
are several reasons why a famous endorser may be influential: -
They attract attention to the advertisement in the cluttered stream of messages
They are perceived as being more entertaining
They are seen as trustworthy because of apparent lack of self-interest
The final element is due to the wide-spread attribution that major stars do not really
work for the endorsement fee, but are motivated by genuine affection for the product
Despite the use of famous endorsers, there is little published evidence regarding effectiveness.
Brand Image Formation & Brand Preference
Having a congruent image between the brand and celebrity does not guarantee any positive effect
on consumers' brand preferences. The fundamental question is - what a brand image really does
to consumers? Baran and Blasko explained, "Since most products aren't special, most advertising
does that entire so-called image stuff... There's no information about the product, there's only
information about the kind of people who might be inclined to use the product." (p.13). This
view is echoed by Feldwick (1991) who has suggested that the subjective experience of using a
brand can be different from the subjective experience of using an identical product without the
brand reassurance. In the case of using celebrity advertising to build brand image, the effects are
examined with a social psychological framework.
Before we can scrutinize the effects of celebrity endorsement on the overall brand, we have to
see the implicit nuances that act as sources of strong brand images or values: -
Experience of Use: This encapsulates familiarity and proven reliability.
User Associations: Brands acquire images from the type of people who are seen using them.
Images of prestige or success are imbibed when brands are associated with glamorous
Belief in Efficiency: Ranking from consumer associations, newspaper editorials, etc
Brand Appearance: Design of brand offers clues to quality and affects preferences.
Manufacturer’s Name & Reputation: A prominent brand name (Sony, Kellogg’s, Bajaj, and
Tata) transfers positive associations. The celebrity’s role is the most explicit and profound
incarnating user associations among the above mentioned points. To comprehend this, let us
analyze the multiplier effect formula for a successful brand: -
S=P* D*AV -- the multiplier effect
S is a Successful Brand
P is an Effective Product
D is Distinctive Identity
AV is Added Values
The realm of the celebrity’s impact is confined to bestow a distinctive identity and provide AV to
the brand; the celebrity does not have the power to improve or debilitate the efficiency and
features of the core product. Thus, we are gradually approaching an evident proposition
claiming, "The health of a brand can definitely be improved up to some extent by celebrity
endorsement. But one has to remember that endorsing a celebrity is a means to an end and not an
end in itself."
An appropriately used celebrity can prove to be a massively powerful tool that magnifies the
effects of a campaign. But the aura of cautiousness should always be there. The fact to be
emphasized is that celebrities alone do not guarantee success, as consumers nowadays
understand advertising, know what advertising is, and how it works. People realize that
celebrities are being paid a lot of money for endorsements and this knowledge leads them to
cynicism about celebrity endorsements.
Costs of Acquiring the Celebrity
Recently, a newspaper report showed how cola firms had gone beyond their advertising budgets
to get the best celebrities. Small firms that use celebrities’ services run greater risks if they invest
large amounts. Although nobody is willing to say exactly how much celebrities get paid, industry
sources say Sachin Tendulkar’s price is believed to be between Rs. 2.0-2.5 crore per
endorsement, and musician A. R. Rehman, who had signed up with AirTel, is believed to have
picked up Rs. 1.75 crore. Film-star Hrithik Roshan was rumored to have picked up Rs. 2 crore
for Fly .With Hrithik campaign to push Close-Up, and ShahRukh Khan’s rate seems to be
between Rs. 2.5-3.0 crore. Aishwarya Rai apparently picks up Rs. 1.25 crore for an endorsement
and the Indian cricket captain Sourav Ganguly is believed to get between Rs. 90 lakh to Rs. 1.5
crore, while film-star Amir Khan apparently makes Rs. 1.5 crore per endorsement.
Some success stories
Cadbury India used Amitabh Bachan not only to recover their image from worm controversy but
also to establish itself as the leading company in the Indian chocolate market Amir Khan’s ad
campaign ‘Thanda Matlab Coca cola’ was also a huge hit. Not only that the company uses the
superstars to come out from the pesticides controversy. Dabur brings in Amitabh Bachan in the
stagnant Chawanpryash market which brings in boost in market and helps Dabur to remain the
The Lux Story: The Lux Soap in its 75 yrs journey as a product always used a Film Celebrity to
promote the product with the most catchy lines ‘Lux meri Khubsurti Ka raaj’. They used a huge
number of celebrities from the beginning to promote their product & in their 75 years celebration
advertisement campaign; they used SRK as the main endorser who has said the famous ‘Lux
meri Khubsurti ka raaj’ along with Hema Malini, Sridevi & Kareena Kapoor. That is the first
time a male celebrity endorsed a female product in India.
When SRK promoted Emami’s Fair & Handsome cream. It was highly criticized as saying that if
a star with SRK’s stature promote whiteness cream then actually we are advocating for racism
saying black is bad & white is gold. And how SRK could endorse such products as there will be
a huge impact among the masses regarding the skin colors. A person must be judged by his/her
qualities & not by his/her skin color. But what we basically forgot that stars get money to
endorse products & we shouldn’t eye washed by the advertisement & there is no point in
criticizing a celebrity for endorsing product like Fair & Handsome.
Shilpa Shetty & Romanov Vodka. Shilpa Shetty also hardly criticized for promoting alcohol.
As being a celebrity she must be a responsible citizen & a responsible citizen should never
promote alcohol. Celebrity branding is all right as long as the celebrity conducts himself in a
good manner but if something wrong happens it will affect the image of the product also. When
Salman Khan got warrant for killing endangered dear ‘Thumbs Up’ has no option but to replace
him. So the product and the celebrity remain good as long as both of them remain individually
good. The main problem of celebrity branding is that when a particular product is known to the
common people with the effect of the celebrity, it is very difficult to separate the product from
the star. Like Coca-Cola - Amir Khan, Cadbury- Amitabh Bachan, Santro-SRK. Now, if any one
of the company want to change their endorser they have to redesign the product to let out their
product from the shadow of the old campaign. In case of celebrity marketing another problem
also arise, that no separate brand value grows up for the product unless and until the product is
extraordinary. The product is known in the name of the celebrity. Sometimes if the attributes of
the celebrity doesn’t matches with paints. So there are certain positive as well as negative points
in celebrity branding in study it is found that people locates Amitabh Bachan with Asian Paints
the most but in reality Amitabh endorsed Nerolac paints and Nerolac’s biggest competitor is
Asian the product, it also gives a negative attribute to the product endorsed. Like in a Survey
RISKS ASSOCIATED WITH CELEBRITY ENDORSEMENT
The concept of “Total Branding” is slowly emerging and many companies are focusing on that.
They are emphasizing on their best practices, customer relationship management, and employee
training and knowledge management. Internal brand management, under which the company
ensures that employees and channel partners are convinced about the brand, is becoming
particularly important, for they are the ones who have to deliver. Thus, the celebrity endorsement
can be considered only as a carrier of what’s inside.
Besides, while designing an ad campaign, one should also keep in mind that the overuse of some
extremely popular celebrities often tends to confuse consumers and reduce the utility of celebrity
endorsement. Another argument against celebrity endorsement involves the behavior of the
celebrity. The marketing function of a company should also understand that brands should
assume a much greater space than the celebrities, because their association may be temporary but
the brands are permanent.
The various risks associated with celebrity endorsements are as follows: -
•Financial Risk - The decision for hiring an expensive endorser may not be always feasible if
there is a poor brand fit.
•Extinction - The favorable response obtained by a particular brand may weaken over time if the
brand gets significant exposure without the association of the celebrity. If the celebrity contract
is for a considerable period of time, then it can lead to draining out capital without proper return.
•Overuse - Sometimes the company can use many different celebrities to appeal to different
market segment. But multiplicity of endorser might blur the image.
•Overexposure - This risk arises when the celebrity chooses to endorse several different
products simultaneously which might leave the consumers confused. E.g., Sachin Tendulkar
endorses several brands such as MRF, TVS Victor, Pepsi, Fiat, Boost, etc.
•Overshadowing - When celebrity endorser is used, the risk of consumers focusing on the
celebrity and not on the brand exists.
•Negative publicity - If the celebrity is strongly associated with the brand then the occurrence of
the negative publicity can spill over the brand.. E.g., Salman Khan lost his endorsement deal with
Thumbs-Up after his infamous incidents like buck-killing and rash-driving.
Not many people can remember all the brands that a celebrity endorses and the chances of losing
brand recall increases if the celebrity endorses multiple brands. For example, in case of Sachin
Tendulkar people recall Pepsi, TVS Victor and MRF, but might not remember brands like
Britannia and Fiat. Similarly, for Amitabh Bachchan, consumers remember ICICI, Pepsi, Parker
Pens, Pulse Polio and BPL. They might get confused in the endorsement of Nerolac or Asian
Paints. Thus, for multiple endorsements where the same celebrity endorses several brands, it
boils down to the strength of the brand and the advertising content.
Whether Celebrity is a Brand User
Various celebrities endorse NGOs and social causes since they believe in the social message that
they need to convey to the audience. One of the most successful campaigns has been executed by
PETA in which celebrities like Shilpa Shetty, Amisha Patel, Yana Gupta, Sheetal Malhar, and
Mahima Choudhary claimed to believe in PETA’s philosophy, and thereby endorse the brand.
The Meaning Transfer Model
McCracken, the author to this model, has suggested that, “The effectiveness of the endorser
depends, in part, upon the meaning he or she brings to the endorsement process.” The celebrities’
effectiveness as endorsers stems from the cultural meanings with which they are endowed. It is a
three-stage process of meaning transfer that involves the formation of celebrity image, transfer of
meaning from celebrity to the brand, and finally, from the brand to the consumer.
Figure 1: The Meaning Transfer Model
Source :( ssrn-id1330351.pdf)
To explain it with the help of an example, we can take the case of Rahul Dravid and Castrol. The
cricket icon is seen as “Mr. Dependable”. And when he endorses Castrol, an image of
“dependability” is tagged on to the brand under promotion.
Culture: The celebrities deliver meanings with extra subtlety, depth and power than anonymous
models. Celebrities offer demographic information with special precision and configurations of
range of personality and lifestyle meanings. They evoke the meanings in their persona with
greater vividness and clarity.
Celebrities actually own their meanings because they have created them on the public stage by
dint of intense and repeated performance. They pass these meanings into advertisements through
meaning transfer process. Preity Zinta, for example, is perceived as a fun-loving, vivacious and
modern Indian woman.
The meaning transfer model proposes that the marketing / advertising firm at first should
determine the symbolic properties sought for the product. Thereafter, they should consult a host
of celebrities and their associated meanings. Finally, after considering budget and availability
constraints, the celebrity should be chosen to represent the appropriate symbolic properties. The
chosen celebrity will have some meanings associated with it which is not sought after for the
product. The advertisement program should take care about keeping the unwanted meanings out
of the evoked set and capture only the salient meanings. The advertisement must be designed to
highlight the essential similarity between the celebrity and the product.
Consumers constantly search for the object world which gives them access to workable ideas of
demography, personality, lifestyle and culture. McCracken suggests that this stage of the model
is most complex, as consumers must claim, exchange, care for and use the consumer goods to
appropriate its meanings.
Celebrities play a major role in this stage as they have created their own self, which makes them
exemplary and inspirational figure to the consumers. Consumers try to emulate the celebrities
admired by them and try to find out the meaning in the similar fashion. Celebrities bring the
dramatic roles, fashioning cultural meanings into a practicable form.
“If commerce is the engine of our economy, then advertising is the spark. Responsible
advertisers are the drivers who keep us on the right track, leading to a richer, more benevolent
In the endorsement process, they make these meanings available in the material form to the
consumers who are keen to bring a self from them. Thus, celebrities become an essential partner
to the meaning transfer process because they vividly demonstrate the process by which the
meanings can be assembled.
There are various scientific ways in which the right celebrity is selected for the product
endorsement, which are discussed here after
Tellis defines stereotypes as perceptions and depictions of individuals based on simplistic, biased
image of the group to which they belong, rather than on their own individual characteristics. For
example: it’s better to select celebrities who say are teens for chocolate advertisements and
females for detergent ads, etc.
The TEARS Model
The attributes highlighted by the acronym “TEARS” are gauged for celebrity selection. These
•Trustworthiness: For example - Legendary actor Amitabh Bachchan who is an icon of trust;
promoting ICICI Bank.
•Expertise: For example - Golfer Tiger Woods for a sports brand.
•Attractiveness: For example - Tennis player Anna Kournikova who earns 10 Million dollars
per year in just endorsement.
•Respect: For example - Former Miss World Aishwarya Rai and the Eye donation campaign.
•Similarity: For example - a child artist promoting a chocolate brand.
A celebrity scoring high on all the above attributes can turn out to be a good endorser for the
brand under question.
The No TEARS Model
The “No TEARS” approach is a tool for managers and their advertisers how to go about
selecting celebrities so as to avoid the pitfalls from making an unwise decision. It gauges the
following information: -
• Celebrity & audience match up,
• Celebrity & brand match up,
• Celebrity credibility,
• Celebrity attractiveness,
• Cost consideration,
• A working ease and difficulty factor,
• An endorsement saturation factor,
• A likelihood-of-getting-into-trouble factor
Selecting the right celebrity does more than increasing sales; it can create linkages with the
celebrities’ appeal, thereby adding new dimension to the brand image. Research conducted by
Katherine Eckel has revealed that “celebrities can get people to make a better choice but cannot
influence people to make a foolish choice” The success of celebrity endorsement in India can be
sought from a market research conducted earlier which found that 8 out of 10 TV commercials
scored the highest recall were those with celebrity appearances. A few examples: Sachin
Tendulkar - Adidas, Sourav Ganguly - Britannia, Leander Paes & Mahesh Bhupati - J.
Hampstead, ShahRukh Khan - Pepsi, Sushmita Sen. - Epson, and Aishwarya Rai - Coke.
CELEBRITY ENDORSEMENT: THE ISSUES INVOLVED
There are several factors to consider before resorting to celebrity endorsement. There is no single
formula to win in the world of marketing. A company must analyze the prospect of endorsement
from 360 degrees, prior to product promotion.
Price vs. Profit
The most important issue is that of return on investment (ROI). Companies need to perform a
cost-benefit analysis prior to endorsement. The process of gauging the effectiveness of
endorsement on the overall brand is but difficult. The companies expect to bring, in the long run,
future sales, revenues and profit from the present investments on celebrity endorsement.
Celebrity endorsement is an expensive means of brand promotion and the price burden almost
always shifts on to the consumers; if not, then it narrows the companies’ profit.
Multiple Brand Endorsement vs. Multiple Celebrity Endorsement
In the advertising landscape, we find either a celebrity endorsing multiple brands or multiple
celebrities being used to endorse a single brand.
Sachin Tendulkar, for example, in 2002 endorsed 12 brands (including Pepsi, Boost, Colgate
Total, Gillette, Britannia Tiger, Fiat Palio, TVS Victor, Fiat Sienna, MRF, Adidas, Visa Cards
and Home Trade). Tripp et al, says that the endorsement of as many as four products negatively
influences the celebrity spokesperson’s credibility and likeability.
FRAMEWORK TO MAKE EFFECTIVE CELEBRITY ENDORSEMENT
Figure 2: Evolution of Celebrity Endorsements
(Source-journal, celebrity endorsement-an effective tool, Prachi Raturi)
The action plan should be able to answer the following key questions: -
How to quantify the value generated by the celebrity endorsements?
Are the celebrity endorsements programs result driven?
Are customers able to connect the brand with the celebrity?
One can gauge the performance of celebrity endorsement marketing program across the various
stages of development (Refer to Figure 2). We have attempted to prepare a framework to build a
more effective celebrity endorsement program
1. Align Celebrity Endorsement With Business Objectives.
The attributes of the celebrity should be intrinsically valuable and aligned with the product,
brand and company. Figure 3 suggests strategies to be adopted by a company depending on its
brand positioning and the brand fit with the celebrity.
• If the brand-celebrity attribute fit is slow, then the company should adopt “Eliminate or avoid”
strategy. The consumers are unlikely to connect between the brand and the celebrity, and the
recall value is likely to be very low; defeating the entire purpose of signing the celebrity. This is
what happened when Good lass Nerolac Paints roped in Amitabh Bachchan as their brand
• When the positioning of the brand is high but the fit with the celebrity is low, the company
should adopt a “Monitor and evaluate” strategy. The company should continuously track the
effectiveness of the celebrity endorsement through surveys, monitoring the sales, etc. Though
Parker pens had a positioning of premier pens, the early advertisements (Refer Annexure 1) with
Amitabh Bachchan showed low brand-celebrity fit.
• When the positioning has not been effective, but the fit with the celebrity is high, the company
should adopt the strategy of “Keep and enhance”. The company has to spot the opportunities to
leverage the celebrity investment and to find more better and effective ways to communicate
with the target audience. The celebrity attributes align with the company’s brand, strategic
business objectives and primary customer segment. The Narain Karthikeyan - J K Tyres
relationship works well in this category.
Figure 3: Brand-Celebrity Attribute Fit Matrix
(Source-journal, celebrity endorsement, an effective tool, Prachi Raturi)
• In the ideal quadrant when the positioning effectiveness is high and celebrity fit with the brand
is also high, the company should follow the strategy of “Grow and partner”. In case of Coke,
the brand has firmly established the “Thanda” position in the minds of the consumer, with Amir
Khan playing the perfect role.
By situating potential celebrity on the matrix, companies can manage the celebrities as portfolios
- re-distributing the resources and marketing efforts to those celebrities with the greatest
potential to increase value, while eliminating those that prove too costly.
2. Measure and Quantify Performance
The company should have proper metrics in place such as increase in sales, brand awareness and
customer preference, to measure the effectiveness and the impact of celebrity endorsement in the
short and long term.
The relationship between the endorsement costs and the benefits is explained further in Figure 4.
The endorsement costs are primarily driven by the endorsement fees and promotion outlays. The
benefits that accrue from such a relationship can be categorized into two components: -
• Value of Hard Assets: The benefits derived from the hard assets are those that have a clear
market value such as increased sales and increase in brand equity. These are the tangible benefits
that a company derives from its endorsement strategy.
• Value of Association: Association value is derived from the target customers who associate
the company / brand with the celebrity. These are the intangible benefits that the company will
accrue in the long-term.
There are ways to quantify the potential value of hard assets and association value against their
impact on company’s celebrity endorsement by looking at the following categories: -
• Incremental Sales: Companies can quantify the effect of the celebrity programs on sales by
performing year-to-year or quarter-to-quarter sales comparisons for targeted consumers,
geographic regions, or specific product lines. Primary research can also be done to reveal the
impact of the celebrity on target customer’s propensity to purchase.
Brand Recognition: One of the objectives of celebrity endorsement is to increase brand
awareness. However, the companies use popular, though incorrect, survey approach by asking
the respondent which celebrity endorsed their brand. Instead, they should ask the respondent the
brands associated with the celebrity. By gauging the top-of-mind recall can enable the company
to find out if a connection is made between the brand and celebrity.
Customer Loyalty: Customer churn can be measured in fixed intervals before and after the
celebrity campaign period to determine the impact of celebrity on customer retention.
Additionally, primary research can be conducted to evaluate changes in the customer loyalty,
customer preferences, etc.
3. Selection and Renewal of Contract With Celebrities
The ability to align goals and measure the value of brand-celebrity fit is the first step in
obtaining optimal value from a celebrity endorsement. Value is also derived by revisiting
the celebrity portfolio to determine ways to reduce costs and increase benefits.
Additionally, a company can increase its benefits by re-examining (and altering, if
needed) its promotion strategy to create deeper brand association, identify new celebrities
that are capable of achieving company goals and negotiate for additional rights from the
existing contracts. A large extent of this can be successful if the company can develop
and execute coordinated, preplanned negotiation strategy which will enable it to improve
the contractual fees and media commitments stipulated in the contract, as well as the
amount and benefits conferred on the company. A few guidelines for formulating a well-
defined negotiation strategy would include:
• Understand the Competition of Celebrity: Except for few venerable celebrities; most
of the celebrities quote their price in expectation of negotiation. The company should
benchmark the contractual fees and benefits against that of comparable celebrities to
ensure the package is equivalent.
• Understand ‘Celebrity’ Clutter: There could be a degree of clutter with the celebrity
endorsing many more brands and companies. This clutter can impede the ability of the
company to capture the image anddddd awareness required to generate value from the
endorsement. The company needs to understand the risk associated with the signing of
such celebrity and need to devise strategic opportunities to stay clear of the clutter.
Figure 4: Endorsement Cost-Value Relationship
• Include Value-in-Kind Payments: Companies can reduce their risk and endorsement costs by
substituting out-of-pocket cash payments with value-in-kind, which can be traded at market
• Protection Against Ambush Marketing: Ambush marketing (or adjacent marketing) is the
reality of the day and the marketing managers need to be creative to stay one step ahead of the
competition. For instance, Amitabh Bachchan was shown drinking Thumbs-Up in the Hindi
movie Kaante, when he is actually brand ambassador for Pepsi.
WHY CELEBRITY ENDORSEMENT FAILS?
There may be cases where brands are not able to take-off even after the backing of celebrities.
And this leads to speculations in the Ad World on the soundness of celebrity endorsement as an
effective communication strategy.
Negative impacts of Celebrity Endorsement on the brand
A popular drawback of celebrity endorsement is the 'Vampire Effect' or the celebrity
overshadowing the brand16. Some viewers forget the brand that a celebrity is approving. Others
are so spellbound by the personality of the celebrity that they completely fail to notice the brand
being advertised. Two new drawbacks can be seen these days what marketers call Celebrity Trap
and Celebrity Credibility17. Celebrity trap is when the celebrity becomes an addiction for the
marketing team and the task to find substitutes becomes more and more difficult, leading to
surfeit of celebrities. Celebrity credibility refers to skepticism by the consumers regarding the
celebrities, especially when there is anything negative regarding the celebrity associated with the
brand in the news, then brand is bound to be affected.
According to leading management thinker, Dr. Seamus Phan, “Many celebrity endorsements fail
because they identify a celebrity they like in an emotive and un-researched manner and then try
to create advertising to force-fit the celebrity into the creative concept.” Therefore, the
advertisers must associate the celebrity to the advertisement and not vice versa. Thinking on the
similar lines, the advertisers shouldn’t identify the brand to associate with the celebrity but do
The success of celebrity endorsement also depends upon the capacity, knowledge, experience,
and qualification to talk about the product. Failure may be attributed to improper positioning
(Example: Amitabh Bachchan, Abhishek Bachchan & Maruti Versa), negative perception after
use of product / service (inferior products), misapprehension of the meaning of the endorsement,
Figure 2: The Symbiotic Model
• Mutualism (M): Both help each other (Example: Tata and Narain Karthikeyan, Amir Khan
• Commensalism (C1): Only one among them is benefited (Example: A failed endorsement)
• Parasitism (P): One is benefited; other is harmed (Example: Azharuddin and Pepsi. Also,
Home Trade & ShahRukh Khan, Sachin Tendulkar)
• Neutralism (N): None of them benefited or harmed (Example: Amitabh Bachchan, Abhishek
Bachchan and Maruti Versa)
• Competition (C2): Both are harmed
• Amensalism (A): Only one of them is harmed; other unaffected
According to our study, the effectiveness of celebrity endorsers is not independent, but is
moderated by several factors like - celebrity attractiveness and credibility, product-celebrity
match, message and product type, level of involvement, number of endorsements by celebrities,
target receiver characteristics and overall meanings (e.g. personality, values, standards) attached
to celebrities. Besides these factors, environmental factors, regulative issues and compatibility
with overall marketing strategy also influence the impact of the endorser.
We focus our study on the following categories.
The targeted consumer
The celebrity endorser
None of these factors can independently achieve a positive impact on the consumer; hence there
exists an indispensable need for these factors to have certain characteristics and a tactical fit
Along with factors which directly impact, we also study the following influencers which have an
indirect effect on the way an endorsement is perceived –
Overall Marketing strategy
Not every brand can and should be endorsed by celebrities. The brand’s image, personality & the
buying involvement of the customer would determine whether or not a celebrity endorsement
would be effective and also identify its endorser.
Research has proved that consumers would react more favorably to celebrity endorsers as against
experts or typical - consumer endorser in products which are high on psychological and / or
social risk. The celebrity creates a positive image and significantly impacts consumer’s
intention-to-buy. Also, for products having aspiration value e.g. premium watches, cars, the
celebrity creates the aura of elitism. Furthermore, products with high financial, performance or
physical risk such as mutual funds, medical equipments, are evaluated more favorably when
endorsed by a professional expert rather than by a celebrity. For products which are low in all
five types of risk, typical consumer - endorsers are most effective since the consumers can relate
to the character (Hershey H. Friedman and Linda Friedman).
An Endorser can be defined as, “Any individual who enjoys public recognition and who uses this
recognition on behalf of a consumer good by appearing with it in an advertisement”. The
following inherent qualities in the endorser usually impacts the brand -
Credibility of image / Trustworthiness (Honesty, Integrity, Believability)
Competence / Expertise (in relation to the product)
Impact of Celebrity on the Brand
Plethora of research has tried to explore the effects that a celebrity exhibits. Celebrity
Creates and helps in retaining attention of the targeted audience.
Achieves high brand recall in an environment with multitude of products.
Transfers of qualities associated with the celebrity to the product.
Perceived as entertaining.
Portrays trustworthiness due to lack of apparent interest
Consumer is the factor being wooed by the company/product using the endorser. Hence, both the
product & the endorser need to meet the expectations of the consumer, thus making it critical to
understand consumer reactions to a given stimulus and product category in differing
I. Consumer - Endorser (C-E Interaction)
Drop in popularity of the celebrity
Sudden change of the celebrity image
Loss of credibility due to over-endorsing
II. Brand - Endorser (B-E Interaction)
Disappearance of celebrity out of media flashlight
Every brand has a personality and the traits found in the brands should be reflected in the
celebrity too. A mismatch leads to confused audience and lack of brand recall, worse in some
cases it might even lead to association of the celebrity with the competitors brand (e.g., Nerolac
Paints where Amitabh Bachchan being a brand endorser of Nerolac paint was perceived to be
associated with Asian Paints).
Is Celebrity Endorsement Always the Best Method for Promoting a Brand?
Companies in many cases, prefer not to use a celebrity, but instead go ahead with a spokesperson
which has been tailor made for the product by the company. The following are the advantage of
such a strategy: -
• Control: Companies control the created spokesperson as it has been built in conformity with
the brand and target audience, and hence can be ensured with a consistent image. Unlike in case
of celebrities where the celebrity’s persona both present and past have been created over the
• Single utilization of created endorsers: Such spokespersons are exclusive for a brand and
hence avoiding any brand conflict.
• Association over a long time period: The spokesperson creates a permanent image by a long
and steady association.
• Focus more on brand and its features: In Non-Celebrity advertisements the main focus is on
the brand and its characteristics while in celebrity the focus sometimes shifts entirely to the
celebrity’s features and their aura & hence the medium fails in carrying the main message across.
Examples of such endorsement are Gattu - Asian Paints, Fido-Dido - 7Up, Hutch - Boy.
I. Market Environment
It indirectly impacts the effectiveness of a campaign. Celebrity campaigns create stronger impact
in saturated markets as products lack differentiation and clutter is huge. E.g., Indian soft drink
industry heavily depends on celebrity endorsement for promotion.
II. Marketing Strategy
Both single celebrity endorsing multiple products and multiple celebrities endorsing single
product at the same time reduces association of product and celebrity and reduces impact (e.g.,
Pepsi - where multiple celebrities are endorsing the product at the same time which takes the
brand away from getting associated/ dependent on any celebrity. Hence, impact is also
influenced by the marketing strategy followed by the company.
III. Regulative Issues
Promotion of products like Beverages and Cigarettes is tightly regulated by authorities who
impact the effectiveness of celebrity endorsement (e.g., Beverages in India are being promoted
using surrogate advertisements and hence a celebrity endorses a secondary product of the brand
and not the primary product- Ajay Devgan for Bagpiper Soda). This reduces the effectiveness of
SELECTION OF CELEBRITY
STAGES OF THE CONSUMER BUYING PROCESS
The six stages are:
Six stages to the consumer buying decision process. Actual purchasing is only one stage of the
process. Not all decision processes lead to a purchase.
1. Problem recognition: difference between the desired state and the actual condition. Deficit in assortment
of products. Hunger-food, for e.g.
2. Information search-
External search, friends and relatives
A successful information search leaves a buyer with possible alternatives.
3. Evaluation of alternatives-need to establish criteria for evaluation, features the buyer wants
or does not want. Rank/weight alternatives or resume search. May decide that you want to eat
something spicy, Indian gets highest rank etc.
4. Purchase decision: Choose buying alternative, includes product, package, store, method of purchase
5. Purchase: May differ from decision, time, lapse between 4and 5, product availability.
6. Post purchase Evaluation-outcome: Satisfaction or dissatisfaction.
Types of consumer buying behavior are determined by:
Level of Involvement in purchase decision. Importance and intensity of interest in a
product in a particular situation.
Buyer level of involvement determines why he/she is motivated to seek information
about a certain products and brands but virtually ignores others.
High involvement purchases--Honda Motorbike, high priced goods, products visible
to others, and the higher the risk the higher the involvement. Types of risk:
The four type of consumer buying behavior are:
Routine Response/Programmed Behavior--buying low involvement frequently
purchased low cost items; need very little search and decision effort; purchased almost
automatically. Examples include soft drinks, snack foods, milk etc.
Impulse buying, no conscious planning.
Limited Decision Making--buying product occasionally. When you need to obtain
information about unfamiliar brand in a familiar product category, perhaps. Requires a
moderate amount of time for information gathering. Examples include Clothes--know
product class but not the brand.
Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or
infrequently bought products. High degree of economic/performance/psychological risk.
Examples include cars, homes, computers, education. Spend a lot of time seeking
information and deciding.
The purchase of the same product does not always elicit the same Buying Behavior.
Product can shift from one category to the next.
Going out for dinner for one person may be extensive decision making (for someone that
does not go out often at all), but limited decision making for someone else. The reason
for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends
will also determine the extent of the decision making.
Categories that Effect the Consumer Buying Decision Process
A consumer, making a purchase decision will be affected by the following three factors:
The marketer must be aware of these factors in order to develop an appropriate MM for its target
Unique to a particular person. Demographic Factors. Sex, Race, Age etc.
Who in the family is responsible for the decision making?
Young people purchase things for different reasons than older people.
Psychological factors include:
Motives: A motive is an internal energizing force that orients a person's activities toward
satisfying a need or achieving a goal.
Actions are effected by a set of motives, not just one. If marketers can identify motives then they
can better develop a marketing mix.
MASLOW hierarchy of needs.
o Love and Belonging
o Self Actualization
Need to determine what level of the hierarchy the consumers are at, to determine what
motivates their purchases.
What do you see?? Perception is the process of selecting, organizing and interpreting information
inputs to produce meaning. That is, we chose what info we pay attention to, organize it and
Information inputs are the sensations received through sight, taste, hearing, smell and touch.
Selective exposure-select inputs to be exposed to our awareness. More likely if it is linked to an
event, satisfies current needs, intensity of input changes (sharp price drop).
Selective distortion-Changing/twisting current received information, inconsistent with beliefs.
Advertisers that use comparative advertisements (pitching one product against another), have to
be very careful that consumers do not distort the facts and perceive that the advertisement was
for the competitor.
Selective Retention-Remember inputs that support beliefs, forgets those that don't.
Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30
minutes-60% of purchases are unplanned. Exposed to 1,500 advertisements per day. Can't be
expected to be aware of all these inputs, and certainly will not retain many. Interpreting
information is based on what is already familiar, on knowledge that is stored in the memory.
Eg.Problems marketing wine from South Africa. Consumers have strong perceptions of the
country, and hence its products.
Ability and Knowledge--Need to understand individual’s capacity to learn. Learning,
changes in a person's behavior caused by information and experience. Therefore to
change consumers' behavior about your product, need to give them new information:
product free sample etc. When making buying decisions, buyers must process
Knowledge is the familiarity with the product and expertise.
Inexperience buyers often use prices as an indicator of quality more than those who have
knowledge of a product.
Non-alcoholic Beer example: consumers chose the most expensive six-pack, because
they assume that the greater price indicates greater quality.
Learning is the process through which a relatively permanent change in behavior results
from the consequences of past behavior.
Attitudes-Knowledge and positive and negative feelings about an object or activity-
maybe tangible or intangible, living or non- living. Drive perceptions Individual learns
attitudes through experience and interaction with other people.
Consumer attitudes toward a firm and its products greatly influence the success or failure
of the firm's marketing strategy.
Attitudes and attitude change are influenced by consumer’s personality and lifestyle.
Consumers screen information that conflicts with their attitudes. Distort information to
make it consistent and selectively retain information that reinforces our attitudes. IE
brand loyalty. There is a difference between attitude and intention to buy (ability to buy).
o Self confidence
All the internal traits and behaviors that make a person unique, uniqueness arrives from a
person's heredity and personal experience. Examples include:
Traits affect the way people behave. Marketers try to match the store image to the perceived
image of their customers. There is a weak association between personality and Buying Behavior,
this may be due unreliable measures. Nike ads. Consumers buy products that are consistent with
their self concept.
Lifestyles Recent Indian trends in lifestyles are a shift towards personal independence
and individualism and a preference for a healthy, natural lifestyle. Lifestyles are the
consistent patterns people follow in their lives.
Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family,
reference groups, social class and culture.
Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay)
spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.)
Roles and Family Influences--
Role-things should be based on the expectations from position within a group.
People have many roles. Husband, father, employer/ee. Individuals role are continuing to change
therefore marketers must continue to update information.
Family is the most basic group a person belongs to. Marketers must understand:
o consumer behavior starts in the family unit
o that many family decisions are made by the family unit
o family roles and preferences are the model for children's future family (can
o family buying decisions are a mixture of family interactions and individual
o family acts an interpreter of social and cultural values for the individual.
The Family life cycle: families go through stages; each stage creates different consumer
o Newly married, young, no children.
o Bachelor stage.
o full nest I, youngest child under 6
o full nest II, youngest child 6 or over
o full nest III, older married couples with dependent children
o empty nest I, older married couples with no children living with them, head in
o empty nest II, older married couples, no children living at home, head retired
o solitary survivor, in labor force
o solitary survivor, retired
o Modernized life cycle includes divorced and no children.
Because 2 income families are becoming more common, the decision maker within the family
unit is changing. Also, family has less time for children, and therefore tends to let them
Influence purchase decisions in order to alleviate some of the guilt, billion of goods in a year)
Children also have more money to spend themselves.
Individual identifies with the group to the extent that he takes on many of the values,
attitudes or behaviors of the group members.
Families, friends, sororities, civic and professional organizations.
Any group that has a positive or negative influence on a person’s attitude and behavior.
Membership groups (belong to)
Affinity marketing is focused on the desires of consumers that belong to reference
groups. Marketers get the groups to approve the product and communicate that approval
to its members.eg. Credit Cards etc.
Aspiration groups (want to belong to)
Disassociate groups (do not want to belong to)
Honda, tries to disassociate from the "biker" group.
The degree to which a reference group will affect a purchase decision depends on an
individual’s susceptibility to reference group influence and the strength of his/her
involvement with the group.
An open group of individuals who have similar social rank, occupation, education,
income, wealth, race, ethnic groups and possessions. Social class influences many aspects
of our lives.
o Upper-upper class, .3%, inherited wealth, aristocratic names.
o Lower-upper class, 1.2%, newer social elite, from current professionals and
o Upper-middle class, 12.5%, college graduates, managers and professionals
o Middle Americans-middle class, 32%, average pay white collar workers and blue
o Working class, 38%, average pay blue collar workers
o Lower Americans-lower class, 9%, working, not on welfare
o Lower-lower class, 7%, on welfare person buys or uses.
Social class determines to some extent, the types, quality, quantity of products that a Lower class
people tend to stay close to home when shopping, do not engage in much prepurchase
information gathering. Stores project definite class images. Family, reference groups and social
classes are all social influences on consumer behavior. All operate within a larger culture.
Culture and Sub-culture
Different society, different levels of needs, different cultural values. Culture can be divided
into subcultures: Culture refers to the set of values, ideas, and attitudes that are accepted by a
homogenous group of people and transmitted to the next generation.
Culture can be divided into subcultures:
Human characteristics such as age and ethnic background.
Data can be collected through primary data or secondary data. It can be seen that secondary data
is not of much use. Therefore primary data become useful. Three widely used methods of
collecting primary data are:
Survey method: In this method information is collected directly through respondents, through
Observation method: In this method the research data is gathered by observing and recording
their actions in market situation. This technique is highly accurate.
Experimentation: This method involves carrying out a small scale trial solution to a problem
while at a same time attempting to control all factors relevant to the problem. The main
assumption here is that the test conditions are essentially the same as those that will be
encountered later when conclusions derived from the experiment are applied to broader market
The panel research: In this research the same group of respondents is contacted for more than
one occasion, and the information obtained to find out if there has been any change in their taste,
demand or they want any special packing or size of product.
There are two types of research:
i) Exploratory research
It seeks to discover new relationships, emphasis on discover of new ideas.
Marketing researchers devote a significant portion of their work on exploratory research when
very less is known about the problem experienced.
ii) Conclusive research
Conclusive studies attempt to determine the frequency with which something occurs or the
relationship between two phenomenon. Usually it assumes certain underlying characteristics of
Research instrument used:
Questionnaires are the major instrument to collect data from consumers.
Questionnaire in the project consist of :
Multiple choice questions
1. Sampling technique used is : Non-probability sampling(Sampling in which each
Element in the population does not have an equal chance to
2. Pilot testing : 30 respondents (age ranging between 15-70years)
3. Direct interview : Through questionnaires (300 questionnaires)
4. Data analysis method : Graphical method
Chi-square test will be used when the set of observed frequencies obtained after
experimentation has to be supported by hypothesis or theory. The test is known as X2-
test of goodness of fit and is used to test if the deviation between observation
(experiment) and theory may be attributed to chance (fluctuations of sampling).χ2 also
enables us to explain whether or not two attributes are associated or related to each other.
To test the goodness of fit: It helps to test goodness of fit by using null and alternate
.1. Chi –Square Test
Between the observed and expected value.
(1) Set up the null hypothesis that there is no significant difference
(2) We compute the value of CHI- square by using the formula
CHI-square = Σ χ2=Σ (( O- E)²/E)
O- Observed value
E- Expected value
Degree of freedoms=(R-1)(C-1)
Level of significance
ANALYSIS OF QUESTIONNAIRES
1) The first question is a general warm up question, preparing the respondent for the
questionnaire. Out of 30 respondents studied most of the respondents purchase lifestyle products
twice a month.
Once a week Once a month Twice a month Never
Male 25 70 50 20
Female 15 65 60 10
2) After asking the respondents what factors affect their buying behavior, the responses were as
Opinion Leader 15
Celebrity endorser 35
Brand name 30
The pie chart depicts that 35%of the people consider celebrity endorser while going for the
purchase, followed by brand name with 30%,price 20%and opinion leader 15%.Brand name
usually covers all aspects like the company name,quality,and if these brands are endorsed by
celebrities, it creates a huge impact.
3) Do you prefer celebrity endorsement as :
This chart depicts that 55% of the people like their products to be endorsed by the
celebrities.25% do not like celebrities, while 20% are neutral. This clearly shows the importance
of celebrities in the life of a common man.
4) Male and female celebrity endorser:
Step 1.State hypothesis
Ho: Female celebrity endorser is more effective than that of male
Ha: Female celebrity endorser is not more effective than male
Set the rejection criteria:
At alpha 0.5 and DoF=4, The critical value from chi square distribution table is 9.49
PREFERANCE MALE FEMALE ROW TOTAL
Strongly agree 75 15 90
Agree 15 45 60
Neutral 30 30 60
Disagree 15 30 45
Strongly disagree 30 15 45
Column total 165 135 300
PREFERANCE MALE FEMALE ROW TOTAL
Strongly agree 49.5(165x90/300) 40.5(135x90/300) 90
Agree 33 27 60
Neutral 33 27 60
Disagree 24.75 20.25 45
Strongly disagree 24.75 20.25 45
Column total 165 135 300
X² CALCULATION∑ (O-E)²/E
Strongly agree (75-49.5)/49.5=13.2 (15-40.5)/40.5=16
Agree (15-33)/33=9.9 (45-27)/27=12
Neutral (30-33)/33=.28 (30-27)/27=.33
Disagree (15-24.75)/24.75=3.9 (30-20.25)/20.25=4.7
Strongly disagree (30-24.75)/24.75=1.2 (15-20.25)/20.25=1.37
Column total 28.48 34.4
As chi square statistics exceeds the critical value of 9.49,hence null hypothesis is rejected and Ha
is accepted. Male celebrity endorser is more effective than female celebrity endorser.
The questions from 5-11 are measured using likert scale.
Strongly Agree Neutral Disagree Strongly
Interesting 150 50 40 30 30
Dependable 30 30 45 145 60
Celebrity is 50 55 65 60 70
Reliable 20 40 50 70 120
Trustworthy 20 30 40 110 100
Celebrity has 30 50 30 110 80
Celebrity 80 70 60 40 45
According to the table it can be seen that using a celebrity makes an advertisement interesting. It
becomes more eye catchy and easy to remember. It helps the companies to position their product
in the market in the minds and heart of the consumer. But even though it becomes interesting the
maximum people think that using a celebrity does not make a product, the company and the
advertisement dependable. The celebrity endorsing the product may or may not be honest. This
factor depends on the creditworthiness of the celebrity as well. As was the case with Cadbury
dairymilk.The controversies arose were settled by the company using Amitabh Bachan, because
of his high creditworthiness. Most the respondents do not consider such advertisement as reliable
They also think that it’s not necessary that celebrity himself or herself use the product. But due
their popularity and image they qualify to be the endorsers of the products.
12).Is celebrity endorsement an effective tool of persuasion.
State the hypothesis:
Ho: Celebrity endorsement is not an effective tool of persuasion
Ha: Celebrity endorsement is an effective tool of persuasion
Setting the rejection criteria
At alpha .05 and 4 degrees of freedom, the critical value from the chi square distribution is9.49
Computing the test:
observed expected O-E (O-E)² (O-E)²/E
Very likely 135 60 75 5625 93.75
Likely 45 60 15 225 3.75
Neutral 30 60 30 900 15
Unlikely 60 60 0 0 0
Very unlikely 30 60 30 900 15
As the chi square statistics exceeds the critical value, null hypothesis is rejected and alternative
hypothesis is accepted. That is, celebrity endorsement is an effective tool of persuasion to
facilitate customer to go for purchase.
13).Will the consumer search more about a product endorsed by a celebrity:
This shows that even though the consumers like to see their products endorsed by a celebrity,
they do not trust them completely and try to find more about a product while going for a
purchase. The division of their product preference is as under:
It can be seen that usually the consumers prefer to search for more information which involve
huge expenditure and electronic products following beauty and health care products and
consumer goods. This shows that companies involved in lifestyle products and consumer goods
should use more celebrities as consumer tend to purchase those products without much search,
influenced by a celebrity.
14).Celebrity persona you like the most:
Celebrity persona %age
Bollywood star 55
Sports star 25
The pie chart depicts that majority of people prefer Bollywood stars to endorse their brands and
25% prefer sports star. While remaining 20%do not want any celebrity endorsing their brand.
Ha: People prefer to see Bollywood stars endorsing their brands than sports star.
Ho: People do not like to see Bollywood stars more than sports star endorsing their brands.
Step 2: Set the rejection criteria:
At alpha.05 and 4 degrees of freedom, the critical value from chi square distribution is 9.49
Step 3.Compute the test statistics: X²=∑(O-E)²/E
Celebrity Observed Expected (O-E) (O-E)² (O-E)²/E
Bollywood star 165 100 65 4225 42.25
Sports star 75 100 -25 625 6.25
None of the above 60 100 -40 1600 16
As the chi square statistics exceeds the critical value of 9.49, hence null hypothesis is rejected.
and hence we reached at the result that alternative hypothesis is accepted. Hence, it can be
concluded that Bollywood stars are not better than sports star and the companies can use both
Bollywood or sports star for their products. It is not that Bollywood stars are better. This myth is
15).This question tries to find out the popularity graph of celebrities. It can be seen that
ShahRukh Khan tops the list for the soft drink Pepsi following Amitabh Bachan and Amir Khan.
Female endorsers are also there but are not that frequently recalled by the respondents. The
popular one among them is Katrina kaif, Aishwarya Rai and Kareena Kapoor.
On conducting the survey it was found that people like to see the celebrities endorsing
their products as it makes the advertisement interesting, but they may or may not trust the
People refer to brand name and celebrity endorsement while purchasing and celebrities
may affect the purchase decision when the expenditure is not much.
An advertisement endorsed by a celebrity is retained longer than an advertisement
without known face.
The people generally tend to see the celebrities endorsing lifestyle products, and not
electronic or other bulky products.
Unique gender biasedness can be seen where male celebrities are considered more
trustworthy and better than female endorsers.
India being a country of cricket, the sportsman are seen as an equivalent and sometimes
better endorsers than Bollywood stars.
The people could easily recall and write the name of brands with their endorsees. This
shows the retention power a celebrity endorsed advertisement have.
Marketeers should try to balance the celebrity with the product to avoid mismatch and
Using a celebrity which does not match with the product’s image may lead to heavy
losses for the company.
It is advisable to the company that it should go for those celebrities who are creditworthy
and are admired by the society and not just use any one for the sake of getting high sales.
Despite the obvious economic advantage of using relatively known personalities as endorsers, in
advertising campaigns, the choice of celebrities to fulfill the role has become common practice
for brands competing the today’s cluttered media environment. There are various reasons for
such extensive use of celebrities. Because of their high profile, the celebrities may help the
advertisement to stand out from the surrounding clutter, thus, improving their communicative
ability. The brief assessment of the current market situation indicates that celebrity endorsement
marketing strategies can indeed justify the high cost associated with this form of advertising.
But it would be presumptuous to consider celebrity endorsement as panacea for all barricades.
Celebrity endorsement if used effectively makes the brand stand out, galvanizes brand recall and
facilitates instant awareness. To achieve this, the marketer needs to be disciplined in the choice
of the celebrity. Hence, the right use of celebrity can escalate the Unique Selling Proposition. It
can act as a source of brand building.
It was found that people love to see the celebrities with the brands, so the involvement of the
common man is pretty high. So the marketer should use the right celebrity matching with the
Celebrity is a means to an end and not an end in himself or herself.
While many studies outline the positive aspects of celebrity endorsement, such as increased
attention, image polishing, repositioning, marketing literature does recognize the potential
negative impacts. Theses hazards include overshadowing the brand, the potential for public
controversy, and the loss of public recognition, not to mention the sheer expense of a major
celebrity endorsement campaign. Sometimes these impacts may outweigh the potential positive
LIMITATIONS OF THE STUDY
The respondents may not give the right answers.
The respondent may be indifferent towards any celebrity. In such a case data collected
will not be of much use.
The tools if not used correctly may lead to wrong interpretations.
It is not possible to collect the opinion of the celebrities who are endorsing brands.
There are also geographical limitations.
The primary data is collected using a small number of people compared to the size of the
universe, the conclusions may not be correct as the sample size may not represent the
population as a whole.
For any project study time duration is a limitation. In small span of time a more
comprehensive study could not be conducted.
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THE STUDY ON EFFECT OF CELEBRITY ENDORSEMENT ON
I am conducting a research on effect of consumer behavior with respect to celebrity
endorsement. Please fill the questionnaire below and help me in conducting the research more
Contact no.: Academic background:
1. How often do you purchase lifestyle products?
a. Once a week b. Once a month
C. Twice a month d. Never
2. What factor effects your buying behavior towards this purchase?
a. Price b. opinion leader c. celebrity endorser
d. brand name
3. Do you prefer celebrity endorsers as-
a. Likeable b. Unlikeable c. Neutral
4. “Male endorser is more effective than female endorser” ,rate this statement.
a. Strongly Agree b. agree c. Indifferent d .Disagree
e. Strongly disagree
Please tick ( ) the answers below:
Strongly Agree Neutral Disagree Strongly
are more dependable
endorsing the product
8.The advertisement is
9.If the celebrity is one
which I admire the
product is trustworthy
10.I believe that the
the product before
11.I think that
celebrities qualify to be
12. Celebrity endorsement is an effective tool of persuasion to facilitate customer to go for
a. Very unlikely b. Unlikely
c. Neutral d. Likely
e. Very likely
13. Will you decide the buy the product advertised by celebrity
without getting to know more about it?
a. Yes b .No c. Can‘t say
If no, then for which type of products do you seek more information?
a. Lifestyle products b. Consumer goods
c .Beauty and health care d. Electronic products
e. Products involving large expenditure
14. Which celebrity persona do you like the most?
a. Bollywood star
b. Sports Star
15. Can you recall and write 5 brands with the name of their endorsers?